Archive for July, 2015:

somebody’s lying

Written on July 24th, 2015 by Jamesno shouts

A couple of weeks ago I wrote about the Dow Theory, that basically looks for confirmation in the broader market  (Dow Jones) and Transportation stocks.  Dow Theory in its basic form says that the transportation stocks must confirm the direction of the broader market, if it doesn’t then there is a red flag.  The rationale (in its most basic form)  is that if the market is heading higher and the economy is good then transportation stocks must be doing really well moving all the product around the country.  If the tranport stocks (truckers, airlines, railways) are not going up with the Dow, then it could be a warning shot.

Add to this that transport companies generally trade inverse to energy prices.  Makes sense right?  The biggest cost to a trucker, airline or railroad is fuel.  So if their expenses are lower and the economy is doing well then transports should be killing it!  Just one problem, energy input prices have been dropping hard the past few months (oil, gas, coal, etc) and so have transport stocks…….

So somebody has to be lying correct?  We hear the economy is growing, jobless rate is at multi-decade lows, oil and gas are dropping but transport stocks are down on the year?

Is it a remarkable buying opportunity in transports (especially railroads)? Or is this a warning that things are not as rosy as they seem?

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Personal Finance FYI – Episode 6: Rental Property tax benefits

Written on July 15th, 2015 by Jamesno shouts

pigs get fat and hogs get slaughtered

Written on July 8th, 2015 by Jamesno shouts

There is an old saying in Wall Street that pigs get fat and hogs get slaughtered. What this means is don’t be afraid to take a profit and book smaller gains. If you are always trying to swing for the fences and score huge gains you will get beat up pretty good. Case in point is anytime the media jumps on an idea, do yourself a favor and get out! I recall just 2 months ago everyone was jumping up and down about how China’s stock market was in a massive bull and you had to jump on board. Well, if the media is promoting it then it is already mainstreet news and the end is near!

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Does the Dow Theory say to sell?

Written on July 2nd, 2015 by Jamesno shouts

This is an excellent article regarding the Dow Theory that has been circulating a bit this year. If you have heard about this relationship between Transports and the broader market, this is a good summary of how it is applied:

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